CAG flays Maya for extra expenditure on memorials

The Comptroller and Auditor General has slammed Uttar Pradesh Chief Minister Mayawati for incurring an "extra" expenditure of Rs 66 crore on her two dream projects - B R Ambedkar and Kanshi Ram memorials here.

Lucknow: The Comptroller and Auditor General
has slammed Uttar Pradesh Chief Minister Mayawati for
incurring an "extra" expenditure of Rs 66 crore on her two
dream projects - B R Ambedkar and Kanshi Ram memorials here.

The auditor said a sum of Rs 15 crore was wasted
transporting stone blocks used in the memorials from Lucknow
to Rajasthan and back. An avoidable expenditure of more than
Rs 22 crore was also incurred by revising contracts.
The two projects - Bhim Rao Ambedkar Samajik Parivartan
Sthal (DASPS) and Manyawar Kanshi Ram Smarak Sthal (MKRSS)
were executed by government body Rajkiya Nirman Nigam (RNN).

Noting that the initial outlay for the two works was Rs
881.22 crore, which included Rs 366.82 crore for DASPS and Rs
514.4 crore for MKRSS, the CAG in a report tabled in the UP
Assembly yesterday said due to frequent changes in
drawings/estimates and addition of new works, total sanctioned
cost of the projects as revised upto December 31, 2009 was Rs
2451.93 crore.

Against this funds of Rs 2261.19 crore were released by
the state government between November 2007 to December 2009.

"The work was suspended from September 2009 due to stay
order of the Supreme Court. The progressive expenditure
against the two works amount to Rs 1776.57 crore upto December
2009," the report said.

"Audit of two works conducted during December 2009 to
February 2010 revealed instances of financial irregularities.
These resulted in extra expenditure of Rs 66.48 crore on the
works besides locking of funds on premature procurement of
material, ultimately increasing cost of the works," it said.

The CAG said the two works involved construction of
boundary walls and flooring of Mirzapur/Chunar stand stone for
which blocks were transported from these places to Bayana in
Rajasthan (670 kms) for sawing and carving and finished stones
were transported to Lucknow (450 kms).
"We are of the view that if sawing and carving of stand
stone was done at Mirzapur/Chunar itself by engaging cutters
there and transporting finished stones to Lucknow (315 kms)
expenditure on transportation could have been reduced to the
extent of Rs 15.6 crore due to reduction in distance of
transportation (1120 kms to 315 kms)," the CAG said.

The auditor said such possibility for reduction in the
cost of the work was not explored by the RNN management.
It pointed out that certain works were executed at high
rates which also resulted in extra expenditure to the tune of
several crore rupees.

The auditor also noted that in November 2007, the joint
purchase committee finalised labour rates of making boundary
walls, installation and fixing stone blocks floorings at Rs
1890 per cubic foot, Rs 1750 per cubic foot and Rs 2400 per
cubic foot.

However, in December 2008 the JPC reduced the rates to Rs
1300 cft, Rs 1250 cft and Rs 1750 cft on its own resulting in
an avoidable expenditure of Rs 22.16 crore on the quantity
executed upto the date of revision of rates in December 2008.

"We observed that reduction in rates inspite of
inflationary tendency in the economy during the intervening
period was indicative of the fact that the management failed
to obtain competitive rates earlier," the report said.

It said that the management replied in December 2010
that due to establishment if machineries and infrastructure by
local vendors at Mirzapur at later stage and increase in
competition due to more vendors at Rajasthan there was
reduction in rates.
"We view that benefit of competition could have been
obtained from the beginning by adequate publicity of the
work," it added.

The report also noted irregular payment of service tax of
Rs 4.51 crore to contractors despite the fact that the nature
of construction activities did not attracted service tax.

"Service tax was applicable on construction of building
or civil structure used to to be used for commercial
activities. We have observed that the works of two projects
were monuments in nature and not intended for commerce or
industry," it said.

The report said RNN does not assess the requirement of
luminary fitting required for the works of DASPS and MKRSS and
failed to link procurement programme with civil construction

"Between February 2008 to April 2009 it procured luminary
fittings when only 62 per cent of the civil work was
completed. As a result fitting values worth Rs 21 crore remain
unutilised upto February 2010," it said.

Subsequently all fittings except those valued at Rs 62.17
lakh were adjusted at other places in the same project or
transferred to other projects of similar nature on the advice
of the architects.

The CAG recommended that the company should take utmost
care in analysing rates of items where works are awarded on
the analysed rates and make endeavour to explore cost
effective alternatives to execution of work.
"The company should finalise rates of different items of
works and follow standard deductions as given in the schedule
of rates of UPPWD and Delhi Schedule of Rates and procure
material keeping in view the time of its requirement," it